What You Can Learn About Engaging Employees from United's 'Bonus Lottery'

Why it's more important than ever to understand your employees' needs

By now, you've probably heard about United's unfortunate plan to replace quarterly employee bonuses with a lottery system that would have awarded a few workers big prizes like $100,000 cash and a Mercedes-Benz C-class sedan.

My fellow Inc. columnist Bill Murphy Jr. compiled a sample of employee comments from United's intranet site. "This is insulting and a poor idea, to put it mildly," wrote one first officer. And a captain wrote, "Awful idea. [Current] bonus program has everyone pulling in the same direction with a common goal. This is scratching a lottery ticket..." And this from a flight attendant: "I can't imagine driving the Mercedes into the employee lot while everyone around me that worked just as hard, or harder got nothing. I would feel like such a jerk."

While United announced on Monday that it "was pressing the pause button" on the ill-conceived bonus program, the damage was already done to the company's reputation and employee morale.

But the good news is that the debacle gives us the opportunity to learn a valuable lesson about employee engagement--so you can avoid making the same type of mistake.

Put simply, that lesson is this: The more you understand employee needs and preferences, the better you can make smart, thoughtful decisions about vital programs like pay and benefits.

I've written many times about how it's essential to develop a deep knowledge about anyone you're trying to communicate with or sell to. The concept, of course, is that the better you understand the demographic profile, needs and preferences of the people you're trying to reach, the better you can design products, solutions or messages that will actually get through to them.

What's the practical application of this idea in a situation like the one United faced? You can imagine what probably happened. A group of people at headquarters--maybe the compensation professionals or the leadership team--were gathered in a conference room to discuss a very real problem: Employee bonuses cost United a lot of money: $87 million in 2017. How could the company reduce this amount while still providing an incentive to employees to work toward important operational goals?

Then someone pitched an innovative idea: Instead of giving modest bonuses to everyone who was eligible, create a lottery in which eligible employees were entered to win valuable prizes. The lottery, in fact, would be open to employees who don't currently receive bonuses. And the new bonus scheme would only cost United about $18 million.

Those in the room quickly agreed that the idea was brilliant. And when the plan was pitched to executive leaders (and probably the board of directors), they gave their approval.

Here's the critical step that United probably missed: testing the plan with employees. What United should have done was to have in-depth conversations--through focus groups or interviews--with typical workers to see how they would feel about the proposed bonus program. If United didn't want rumors to start or to reveal everything that was being planned, those leading the effort could have tested several different ideas, including the lottery program. Doing so would have revealed employees' negative reactions before the bonus plan was introduced.

Sounds simple, doesn't it? And it is: The more you know, the more you can create solutions that meet employees' needs. And that helps you accomplish your objectives, whether you're the CEO, an HR professional, a communicator, an IT leader, or anyone running a program or leading an initiative.

Plus, this form of qualitative research (using discussion to understand why and how) is ideally suited for employee research, since the group dynamic replicates the collaborative environment of the workplace. Employees are accustomed to working together: They gather for meetings, they collaborate in teams, they huddle in a group to fix a machine or solve a problem. So they're comfortable with the interaction of the group experience.

My experience--from decades of moderating focus groups--is that taking the time to talk to employees is always worth the effort. Employees are smart and dedicated--and they always provide thoughtful feedback.